How much does it actually cost in legal fees to raise a funding round? Here’s what we found in looking at 9,059 transactions in our dataset:
The average pre-seed round cost just shy of $10k in legal fees to raise—quite affordable, and I know lots of people who have raised pre-seed rounds for $0. One of the reasons that the SAFE is so popular in early-stage financing is that it’s really lightweight: it’s a standard document everyone agrees on, so no one racks up a big bill having their lawyers go back and forth on a series of edits.
The average seed round clocks in a bit higher than that: around ~$17k. But the average seed round is anywhere from 2x-5x as big, so it makes sense that it takes your lawyer a little longer to send all those DocuSigns out.
There’s a big spike on the Series A, with an average cost of nearly $40k. Why? Well, it actually might have something to do with how priced rounds are structured. A term sheet typically contains a clause like “[VC] fees to be paid by the Company, not to exceed $25,000 without prior agreement by the Company.” In Series A, you’re generally paying for two sets of lawyers: yours, and your VCs. Combine that with the fact that the deal is more complex, and you see why the bill skyrockets.
Interestingly, the average Series B legal fees are quite close to those of the Series A. Even though the check sizes are bigger, the process itself is largely the same, which explains why it’d be similar in cost.